How
to Learn support and resistance - Now you move deeper again to
discuss the support and resistance. You will continue to be
guided to recognize and understand what support and resistance.
Do you still remember the concept of supply and demand (supply
and demand)? When demand rises then supply is down, then the price will rise.
Vice versa if supply rose then demand fell, then the price will go down.
That's the word from a high school economics teacher.
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| How to Learn support and resistance for Beginners |
Well in fact, the price of the currency in the market
will always move up and down. It is influenced by supply and demand for the
currency. Once, there was a time in the market where the price stops moving up
or stops moving down. That's because it is caused by demand or supply that is not
large enough to cause prices to go up or down.
In technical analysis, you may be able to predict roughly
when demand or supply large. The trick
is to identify support and resistance levels proficiency level.
So what is support and resistance?
Support is a price level areas, where the level of demand
that is large enough to hold the fall in prices Demand> Supply. At this level, the one, the price will tend to stop moving down, and likely could rise again.
Briefly support level is expected to
withstand the movement bearish (down).
While resistance is a price area where at that level
supply large enough to stop the rise in the price of Supply> Demand. At this level, the price will tend to move up, and Likely Will fall back. More short
the resistance is expected to hold a bullish (rising).
For example you can see the picture below.
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| support and resistance |
The image above shows a zig-zig lines forming graph
moving upwards. When the price goes up
and then down again, then the highest point achieved before going down again it
is called resistance.
When
the current price moves up again, the lowest point reached before the price
goes up again that which is called support. Such was we determine the level of resistance and
support to the movement of prices can go up and down all the time.
You should know that the level of resistance and support
should not be a definite level. This means that it is natural that some traders
to disputing some numbers when Determining the resistance and support. Most
important is the resistance and the support is in the range of numbers that are
not too far away.
Resistance
becomes support and the support becomes resistance.
Are you confused? Do not confuse the first, Okay let's
discuss.
Although from the beginning of the discussion of Reviews
These support and resistance levels is said that it is Able to withstand the
rate of price movements. But it does mean that the levels would be eternal
(permanent) forever. In contrast, the same thing will happen to the resistance,
where the supply is no longer big enough to hold the upward movement.
Example you stand in one room, no floor and ceiling. The
ceiling in the room, you analogy just as resistance. While the floor, your
analogy as support, and in your hand there is a golf ball, and then you throw
the golf ball up to touch the ceiling. If you do not throw too strong, then the
golf ball will go back down to the bottom. But if you throw a strong enough
that it will pierce the sky. so the explanation.
Conclusion
So when the resistance is broken then the price will
continue to move up. Resistance is happening is above the price, it is now the
position of the resistance is under the price. that's when the resistance
turned into support.
So also with the support, when support broken then the
price will continue to move down. Support is happening under the price, now
support positions is above the price, that's when the support turns into
resistance.
